AB InBev: “The beer market has drastically changed”

AB InBev: “The beer market has drastically changed”
Benoit Bronckart

“The beer market has never been as interesting as it is now”, AB InBev’s sales director off-trade Benoit Bronckart said. There is a positive vibe in the beer industry and the brewer has embraced diversity more than ever.

Positive trends

AB InBev’s meeting rooms in its main office (in Leuven) now have beer if someone so desire. Alcohol-free beer obviously: Jupiler 0,0 % or Hoegaarden radler 0,0 %. These beers are perfectly fit for work, at any time of the day, because they are alternatives to water, soda or coffee.

 

Their introduction is telling of how much the beer market has changed in the past few years, Benoit Bronckart said. “When I returned to Belgium, having spent several years with AB InBev France and Luxembourg, I noticed the market had totally changed – for the better, I must add. I see a lot of positive trends, like the “Fier op ons bier” (Proud of our beer) initiative or how our beer is now part of UNESCO’s Intangible cultural heritage list. I see an increasing number of retailers that consider beer as a “destination category”, a huge change compared to before.”

 

More complex

Nevertheless, the facts are not that positive, because 2016 has been a difficult year. “We cannot deny the beer market has dropped in volume. The weather has not been favourable and the consumer has chosen to go for “fewer, but better”. However, there has been a value increase and our challenge is to support that growth. We want to create value, but also to achieve volume growth as well, which is hy we will boost the frequency and short-term penetration.” AB InBev has three growth areas in mind: product range, image and health.

 

The beer market’s major diversity makes it a very interesting market, according to the sales director. “There are more beer breweries every year, more flavours and beer types as well.” The biggest challenge is to make sure that shoppers can still “read” the beer category, which was a lot easier in the past: we had beers that dominated the market (70 %) and the craft beers, but nowadays, the market is much more complex.

 

“Take a look at the regular beer market. We used to have crates with 24 bottles, but now you have smaller sizes, cans have become more popular and there are even trendy aluminium bottles. We market through partnerships like Tomorrowland or the Rode Duivels (Belgium’s national football team) and we have very successfully launched non-alcoholic versions.”
 

Fewer but better

The consumer seeks quality, flavour and authenticity in its craft beers, based on the motto “fewer but better”. The consumer values the beer ritual: every beer needs to be in the right glass and even food pairing is a theme.  
“You have a lot more products to cover 80 % of the market’s needs nowadays and that is a challenge: to make the right decisions that keep in mind the important regional differences.” You cannot present the same range of beers everywhere. You have to remain relevant to the local beer consumer. 


“We have embraced that diversity at AB InBev. We no longer try to fix everything with Leffe, even though that will still be our flagship product. Now, we also try to give our other beer brands plenty of attention. Our Brouwerij Bosteels partnership has given us several beautiful brands, like DeuS, Kwak and Tripel Karmeliet, which we will help grow thanks to our strong in-store execution. We also want to activate our other beautiful craft beers, like Julius or Hoegaarden Grand Cru.”
 

Trendy beers

Brussels-based organic beer Ginette’s acquisition is also a beautiful story. “If you can no longer achieve your growth ambitions with your own means as an entrepreneur, you seek out collaborations. That is what Ginette’s founders, who really believe in organic products and want to have an impact. To be able to do that, you need scale and that is something we can offer. It is an actual partnership. Ginette may have been part of an organic store’s product range, but it was barely available in retail, which will change. Organic beer is an interesting new segment for retailers.” 


Benoit Bronckart points out new beer segments that did not exist (or barely existed) five years ago. Trendy beers like Cubanisto (with rum) or Corona (with lime) target a young and trendy audience. They are not as bitter, similar to radlers that have become mixture of beer and juice, containing lower alcohol percentages. 


“On the other hand, AB InBev focuses a lot on beers with low or no alcohol levels. By 2025, we want 20 % of our global beer volume sales to have an alcohol level of 3.5 % or lower. In that sense, Jupiler 0,0 %’s launch is an important step, just like the different variations of the Hoegaarden radler 0,0 %. These beers can be enjoyed at any time of day, for any occasion, even at work. We strongly believe in the long-term potential of alcohol-free beer. Their penetration is higher with young people, but it is not yet part of a consumer’s shopping list. That is why it is very important to secondary placements in stores and to use sampling as a method to engage people. They need to taste it to become convinced of its quality. Seeing how flavour is so important, we will have more than one million samplings for Jupiler 0,0 %’s launch.

 

Bring people together

The sales director is worried about the increase in aggressive food retail discounts. “I want to sell our beer, not give it away.” Discounts have to have a very specific purpose: market penetration, increased frequency, stock-up stimulation, trials for novelties? Based on that, you create a planning for your discounts. “We have a role to play and we want to expand the category. To that end, we need to collaborate strongly with retailers. We have some very nice category management projects and the retailers are on board. There is a positive beer vibe and the perspectives are good. It is all about education, experience and authenticity.”


There is an important period coming up for beer sales, because the festival season launches in June. “We have a strong presence there, including at Tomorrowland. We will launch an aluminium Cubanisto bottle and the limited edition Jupiler bottles are also back. Let’s not forget this is also the first year we have Corona back in our portfolio and we will bring back the brand’s basics, the lime ritual.”


Beer has always been an emotional experience in Belgium, Benoit Bronckart knows. Everyone has an  opinion. “You rarely drink beer alone; it is a drink for social moments, to enjoy in the good company of others. We also have a social role with AB InBev. We bring people together; that’s in the DNA of beer.”